Medifast Inc. Earnings: Misses Expectations as Profit Falls

March 13, 2012

Medifast Inc. (NYSE:MED) reported a lower net income in the fourth quarter compared with a year earlier, falling below analysts’ estimates. Medifast is engaged in the production, distribution, and sale of weight management and disease management products and other consumable health and diet products.

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Medifast Earnings Cheat Sheet for the Fourth Quarter

Results: Net income for Medifast Inc. fell to $1.2 million (8 cents per share) vs. $3.4 million (23 cents per share) a year earlier. This is a decline of 64.9% from the year-earlier quarter.

Revenue: Rose 10.5% to $69.6 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Medifast Inc. fell short of the mean analyst estimate of 21 cents per share. Analysts were expecting revenue of $71 million.

Quoting Management: “We ended the year with a renewed strategic focus on driving operational excellence throughout our Take Shape for Life, Medifast Direct, Medifast Weight Control Center and Wholesale Physicians sales channels, and our internal support divisions to better position our business for maximum profitability long-term,” stated Michael C. MacDonald, Chairman and Chief Executive Officer.

Key Stats:

The company has now seen net income fall in each of the last two quarters. In the third quarter, net income fell 11.9% from the year-earlier quarter.

The company has now fallen short of analyst estimates for the last three quarters. It missed the mark by one cent in the third quarter and by 6 cents in the second quarter.

Looking Forward: The average estimate for the first quarter of the next fiscal year is steady at 45 cents a share. For the fiscal year, the average estimate has moved up from $1.42 a share to $1.43 over the last sixty days.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com